Mission UK

One of our buds at Mission advises that they intend to "perform strictly to
contract" on our Confirm #1 ending May 31, then claim us in default and
cancel any tons not shipped. Mission then intend to be the customer from
hell on the second confirm for shipments through June 2001.

Mission was less then enthusiastic about our offer of USD 13.7 mm to buy down
the contract. Instead they obviously intend to frustrate the contract
through non-performance by virtue of a strict interpretation of their
obligation to accept..

My thought is to go to them with a "no harm - no foul" settlement that will
cancel the balance of the tons under the first confirm, waive any claims we
have due to vessel demurrage, extra handling costs, them being jerks, etc. in
return for a blanket bilateral agreement that neither of us has any claims
against the other for deliveries made under Confirm #1. In return they agree
to accept certain minimum levels of tonnage on a weekly basis at their
stations under Confirm #2, and promise to play nice in the future.

This would allow us to mark the LBT "over charge" we are holding of about USD
8 mm now gathering dust, and will give us a pretty good reason to mark the
forward "over charge" for LBT shipments to be made against Confirm #2.

Mission will think they are screaming studs - having knocked us to our knees,
while in reality we walk away with their money. Sounds like a win-win to
me. Also sounds like something we need to pass by you lawyer types.

Thoughts?